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Oi presents debt restructuring plan to court 

The board of directors of Brazilian operator Oi approved the terms and conditions of the company's Judicial Reorganization Plan and presented it to the court in Rio de Janeiro managing the company's restructuring process. The plan establishes the terms and conditions for overcoming the company's debt crisis and ensuring the ongoing continuity of the business, including measures for the restructuring of liabilities, obtaining new financial resources and the possible sale of fixed assets.

Oi is proposing international bondholders take a 70 percent haircut, the Wall Street Journal reports. Bondholders would receive new debt with a face value of about 30 percent of what they are owed. Those bonds could be converted to equity in up to 85 percent of the company’s capital if they aren’t redeemed in three years.

In addition, the company may seek new capital and proposed the sale of several assets. Asset sales may include its stake in telecom companies in Asia and Africa, such as Timor Telecom, CVT and Unitel, its fibre-optic network in Sao Paulo, real estate units, towers and data centres, Bloomberg reports. Oi is also proposing to pay for more than BRL 13 billion in fines it owes to regulator Anatel through investments.

Oi hasn’t discussed this plan with bondholders, who may reject it outright, people familiar with the matter told the WSJ. According to Bloomberg, two of Oi's biggest shareholders are close to an agreement on the recovery plan. The company is already in talks with Pharol and Brazilian magnate Nelson Tanure, which would have some form of shared management of Oi under the deal.
The company now has 30 days to discuss the plan with creditors before a general assembly takes place presided by the judicial administrator.

Oi filed for bankruptcy protection in June with around BRL 65.4 billion (USD 19.7 billion) in debt and liabilities, most of which is owed to international bondholders and local banks. Oi earlier attempted a settlement with creditors for bondholders to swap their debt for equity and take control of the company. However, Pharol, the successor to Portugal Telecom and its largest shareholder with a 22.24 percent stake, refused the deal.

Source : Telecom Paper